November 25, 2003 3:52 PM PST

Publishers bet on Friendster-like service

Publishers Knight Ridder and The Washington Post Co. are banking on social networking to be the future of online classifieds, having invested $6.3 million in a "six degrees" Web venture.

The two publishers, along with venture capitalist Mayfield, on Monday invested in Tribe Networks, the owner of an online community that links friends and friends of friends, and then promotes them as the ideal network through which to buy things, find a job or even get a restaurant recommendation.

Called Tribe.net, the four-month-old site plays on the theory of "six degrees of separation," in which strangers are inevitably linked to each other by at most six people. The goal is to join like-minded people for socializing, dating, networking or building a local marketplace.

That idea is the foundation for a wellspring of dot-com start-ups, including the popular network Friendster, whose bent is toward socializing rather than classified ads.

Silicon Valley venture capitalists are showering investments on online networking upstarts. Friendster recently raised $13 million in a round of funding Benchmark Capital and Kleiner Perkins Caufield & Byers led. LinkedIn, whose community caters to professionals looking to network, also recently announced a funding round of $4.7 million Sequoia Capital led.

But the publishers' interest is significant, because it signals a potentially new direction for online classifieds, a billion-dollar market newspapers risk losing to niche sites like job clearinghouse Monster or online communities such as Craigslist. Knight Ridder and The Washington Post Co., parent of newspaper The Washington Post, say they want to incorporate social networking as a means of building an indispensable local marketplace for information or goods, and ultimately to inspire loyalty to their publications.

"When I thought about this, it occurred to me that friends and friends of friends are really important to us in general to making decisions. And (that's) replicable online," said Chris Schroeder, CEO and publisher of Arlington, Va.-based Washingtonpost.Newsweek Interactive, publisher of the online counterpart to The Washington Post.

"This is another way...to connect to the folks in our community," Schroeder said.

The Washington Post is currently evaluating how it can work with Tribe. But the goal is to eventually help drive revenue from classified listings. The Washington Post makes about a third of its online revenue from classifieds.

Knight Ridder Digital, the online arm of the nation's second-largest newspaper publisher, Knight Ridder, also has plans to incorporate Tribe into its network of sites, which includes local guides Real Cities Network. "By combining Tribe's social networking tools and listings with our strong, branded local market presence, it's a win for both of us," Hilary Schneider, CEO of Knight Ridder Digital, said in a statement.

Tribe said it has signed up 48,000 registered users since its launch in late July. The company plans to make money through online advertising and by selling paid listings in classified categories such as jobs, personals, cars and real estate.

The company describes the service as a cross between Friendster and Craigslist, a local nexus for exchanging goods, finding a job or renting an apartment. "We're helping you get things done through your friends and their friends," said Tribe director of marketing Darian Patchin.

"We want to be the place that offers and distributes online classifieds of a more personal nature."

 

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